ECM Executive Market Insights
Power Access & Grid Intelligence- Article 3 of 4 part mini series
What Executive Decision Makers Need to Know
Executive Insight
In Part 2 of this Executive Briefing Series, we examined the specific rules behind PJM’s submission to FERC to offer more transmission options for Large Load Additions.
This third briefing shifts from the “why & the what” to the “when & how.”
One of the primary goals of both FERC and PJM is the need to construct a new approval process for large loads and generation that can be started and completed within one year. Prior to filing their response to the show cause order, PJM introduced the specific requirements and rules for each stage. This combination of expedited approval processes, more efficient and flexible transmission offerings combined with improved load forecasting seeks to facilitate and accelerate the Path to Power. This final product has been renamed as IRAS – Interim Resource Adequacy Service and contains the roadmap for proceeding with Large Load Interconnections.
BOTTOM LINE: Rules continue to change and executives involved in growth plans involving significant power requirement need to stay on top of their options to stay in front of the competition. Continue on for insights to what is coming.
Large Load Registry
The process theory behind the new approval method is to start with a Pre-Application made by the developer in conjunction with the TO/ Utility (ED).
When reviewing the existing process for Large Load Additions and Transmission Owner led Load Interconnection processes, it was found that the preliminary studies completed by the TO/ Utility for the M-3 Supplemental Upgrades and the “Do No Harm Study” were not aligned with the Regional Transmission Expansion Planning process which could add a year or more to the approval process.
What the proposed process recommends is that the TO/Utility provide the study for the transmission effects on their side of the Transmission system and the Do No Harm study prior to working with PJM. The TO’s study which includes the Large Load Addition can be provided to the RTEP when completed and at the same time application is made to PJM for the project.
The developer can proceed with the TO/Utility to make application to PJM and proceed with the “Pre-Application Screening” which will take approximately 4 months and assist with weeding out projects that are not viable or too expensive to move forward.
The next step is for PJM to perform a System Impact Study (SIS) which is now put together as a cluster study, which will evaluate multiple projects in the same load zones or Points of Interconnection (POI). The purpose of this study is to determine the impact of these proposed projects on the generation/transmission side operated by the interconnection. The study outlines the cost and obligation of the parties involved and the upgrades required before the projects can be approved. The last stage is for the TO/Utility to approve the upgrades and provide the additional upgrade costs and then all the parties can move forward with the interconnection agreements.
Transmission Service Offerings
The final proposal made by PJM to FERC, encompasses the service offering discussed in our last executive insight. Those offerings have been modified and presented under a new service offering called Interim Resource Adequacy Service (IRAS). The two most important points to note are that PJM is placing the management of this process squarely in the hands of the TO/UTILITY entities and that this offering is only available under specific conditions. The Large Load Registry will contain all the current projects that exist and are continuing to move forward to allow for better transparency into the problems and progress following the development. It will also allow for more accurate load forecasting information.
Bring Your Own New Capacity will continue as a service offering with clarifications made around what constitutes “New Capacity”. Capacity created at existing generation facilities will be seen as New Capacity as long as the resource has never been used in prior capacity auctions.
The Connect and Manage program has remained consistent with the original offering as far as its rules for curtailment for LLA’s that do not bring 100% of their own new capacity. PJM’s service offering places the responsibility for identification and placement of LLA’s into the Connect & Manage program in the hands of the TO/Utility’s and the State in which the loads are located. These entities will define what entities are in Connect and Manage and then they will decide how emergency curtailment shall be allocated amongst the various Load Serving Entities. PJM will provide the MW amount requirement under IRAS rules and the individual LSE’s will decide how to allocate that responsibility amongst their customers.
IRAS defines the procedures for emergency actions when resources do not meet the quantity of demand required. The new IRAS service will be deployed first before the Pre-Emergency Load Management Reductions are called for participation. Manage and Connect Entities that participate in IRAS and shed load, will be reimbursed based on a Federally approved program administered through the Electric Distributors (ED) and Utility Owners.
The Reliability Backstop Auction will remain as a tool to identify and provide capacity where the long term capacity auction results indicate a Resource Adequacy problem.
What Does This Mean to Executives and Developers?
PJM’s filing to FERC clearly indicates that the rules and requirements that are being considered are “interim policies” which are specifically entered into to address periods of Resource Adequacy shortages. If approved, it should signal to developers and Data Center Executives that these rules are intended to be temporary in nature and once the amount of generation installed covers the demand that is present, these rules will not apply and the original operational rules will return. So here are some recommendations as you enter into these projects.
Developers and Executives should design contracts to address issues of BYONC and how they can exit any developments where they have paid for generation development.
Developers and Executives should consider negotiating in advance with the LSE handling their load, how they will be subjected to curtailment and how much they will be paid.
Projects which have new generation developed at the site of existing generation can be used as BYONC as long as they can prove that the particular generation asset has never been used or interconnected. This possibility allows for rapid permitting and expedited approval because studies already exist and the equipment to interconnect is already at the site with less upgrades required to make the facility operational.
Credit requirements for the different offerings need to be clarified and specifically stated prior to contract execution with an LSE or Developer.
On September 30th, 2026, PJM cancelled it’s Reliability Backstop Auction for the deficiency in the 2027/2028 Capacity Auction citing various developments which may have eliminated the need for the auction. At the same time, FERC accepted PJM’s filing but suspended any decisions regarding the filing until after February 27th, 2027. As of the publication of this article, PJM has filed for an expedited emergency hearing to decide on these by October 28th, 2027. What appears to be a standoff will not stop the ability of developers and data center customers to pursue their projects with the understanding that costs and responsibilities may change over time. Progress is continuing, one baby step at a time.
Stay Ahead of PJM Changes
Receive ECM’s Executive Brief when PJM finalizes its Large Load reforms.
